The papers report that the National Housing and Planning Advice Unit is predicting that house prices will reach 10 times average earnings.
This, though, is not a description of a future reality, but rather a threat. To see why, consider the obstacles to such high prices:
1. They'll become unaffordable. At current mortgage rates, the monthly repayment on a £250,000 mortgage would be equal to all the take-home pay of a £25,000 salary. Even a couple with an income of £50,000 will be spending half their post-tax income on the average mortgage.
2. There's no reason to suppose interest rates will fall as house prices rise. Quite the opposite, if home owners increase their spending in response to higher wealth.
3. High prices will naturally induce selling, as home-owners sell up to buy a place in the sun.
4. High prices will also reduce speculative demand for housing. In a rational world, this'll be because high prices should mean lower expected returns. In the real world, it's more likely to be because of the huge cost of buying. The Beenyitis that's stoked house price inflation recently should therefore subside.
5. There'll be a political backlash. Discontent amongst frustrated buyers is likely to lead to pressure to relax planning restrictions, with the result that more places will be built. This will bid prices down.
Indeed, this is precisely the purpose of the NHPAU forecast - to agitate for more building.